American
Business Preparing for CAFTA-DR Implementation
Commerce Secretary to lead first Trade Mission to Central America since U.S.
Passage
Mark
Siegelman,
Central America Desk Officer,
U.S. Department of Commerce
On August 2, 2005, President Bush signed the implementing legislation for the U.S.-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR), which the Congress approved in July. CAFTA-DR has also been approved by the legislatures in El Salvador, Guatemala and Honduras. Approval is pending in Costa Rica, the Dominican Republic and Nicaragua.
The agreement will enter into force on a date to be agreed upon among the parties. Although most U.S. free trade agreements have entered into force as of the first day of a new year, there has been no decision yet on when the CAFTA-DR will enter into force. The agreement will likely be in effect for the countries that have ratified thus far, presuming each country has completed necessary legal requirements. For the remaining countries, the CAFTA-DR text provides that the agreement shall enter into force 90 days after the country notifies that it has completed its ratification process and has completed the necessary legal requirements. Unless the parties otherwise agree, this notification has to happen within two years after the initial date of entry into force.
Once implemented, CAFTA-DR will create substantial new opportunities for U.S. manufacturers, workers, and farmers by eliminating tariffs, opening markets, promoting transparency, and establishing state-of-the-art rules for 21st Century commerce. More than 80 percent of U.S. exports of consumer and industrial goods will become duty-free in Central America and the Dominican Republic immediately upon entry into force, with remaining tariffs phased out over 10 years. Key U.S. export sectors will benefit, such as information technology products, construction and agricultural equipment, paper products, chemicals, and medical and scientific equipment.
The region covered by this agreement is the second largest U.S. export market in Latin America, behind only Mexico, and the 10th largest U.S. export market in the world, buying nearly $16 billion in U.S. exports in 2004 (more than Russia, India, and Indonesia combined). Equally important, the agreement will promote economic reform, rule of law, and stronger democratic institutions among an important group of U.S. neighbors.
In order to take advantage
of the new regional opportunities offered by CAFTA-DR, Secretary of Commerce
Carlos M. Gutierrez will lead a senior-level U.S. business delegation to Guatemala,
El Salvador and Honduras on October 16-22, 2005. The business development
mission will demonstrate U.S. commitment to the markets of Central America
and maintain the momentum following the recent U.S. approval of this historic
free trade agreement.
The mission will include three stops: Guatemala City, Guatemala; San Pedro
Sula, Honduras; and San Salvador, El Salvador. In each city, participants
will meet with key government and business representatives, chambers of commerce,
trade associations, and potential business partners. Outside of the official
mission program, participants may choose to add stops in San Jose, Costa Rica,
and/or Managua, Nicaragua - additional payments will apply to cover Gold Key
Service appointment fees. In addition, an opening regional business event
in Guatemala is being planned that will attract private sector participants
from all the CAFTA-DR countries.
Representatives of the Overseas Private Investment Corporation (OPIC), U.S. Trade Development Agency (USTDA), the U.S. Export-Import Bank (Ex-Im), the U.S. Small Business Administration (SBA), and U.S. Agency for International Development (USAID) will participate, as appropriate, in order to provide information and counseling on their programs.
Recruitment for the mission
is being conducted in an open and public manner, including publication in
the federal register. Businesses interested in participating in this trade
mission should call the U.S. Department of Commerce Office of Business Liaison
(202) 482-1360 or visit http://www.buyusa.gov/centralamerica/en/.
Deadline for all applications was September 16, 2005.